charlieruane

Restaurant Depot just sold and would've been perfect—founder-owned, sold for $29.1B to Sysco Foods. That one's worth reading about, it was a very Berkshire-like business, sale, and acquisition. Founder wanted assurances that the biz would live on without being gutted.

Call me crazy, but the Shiller P/E is above 42—isn't now precisely the moment we *want* Berkshire to sit in cash? Isn't that, like, our core strategy? Sometimes I feel like I'm taking crazy pills. The headier valuations get, the easier we should make it for Greg to sit in cash! I see all of these articles applauding Greg for taking swings, "Berkshire is back," etc. Well, Berkshire was arguably most "back" when it was letting cash pile up amid a speculative fervor.

One could argue that the big news amid all of these moves is actually Greg's ongoing reduction of Berkshire's decentralization, via this new building products/homebuilding platform. One of the costs of this change is that it makes Berkshire a less appealing destination for long-held family businesses that founding families want to see live on unperturbed... though maybe Greg's calculus is that there aren't too many of these businesses left for Berkshire to acquire, so scaring the remaining ones away isn't that big of a price to pay.

Well, do you know how to identify smaller compounders? If so, buy them! I just use Berkshire as my hurdle rate. Will this other idea beat Berkshire? If yes, buy it. (And sometimes this other idea is just holding cash.) If no, buy Berkshire. Your question depends entirely on the alternatives available to you.

Beyond the float benefits inherent in all airline loyalty programs, Delta has the most devout following of the major airlines... they've successfully positioned themselves as the premium option via investments in lounges (Sky Clubs and Delta One) and premium cabin offerings that outclass their competitors. The Amex partnership only reinforces their walled garden. So with Delta in particular, Buffett/Ted may see some Apple-esque-premium-walled-garden-consumer-product effects in the mix. Anecdotal, but the airline status-obsessed people in my life uniformly fly Delta. The other airlines, especially United, have realized the power of this strategy and are starting to play catchup. But Delta has a lead.

I stopped reading his post at the sentence about BNSF earning a pittance on its replacement value. He's misreading Buffett's comment—it's fine that BNSF earns a pittance on its replacement value (hundreds of billions of dollars), what matters is Berkshire's return on the price it *paid* for BNSF, which was way, way below its replacement value. In fact, Buffett believes BNSF's high replacement value is a key source of its moat! Who would devote the capex to build a competitor that'd earn such meager returns on replacement value in the end?

Tim Cook stepping down!

So looks like BRK bought back $225mm on the first day of the new round of buybacks—according to Kingswell, at least. (I haven't checked the math/proxy yet.) Dare we extrapolate a monthly rate from that one-day figure...? Assuming 21 trading days per month and regular daily buybacks at that rate, that's $4.7 billion per month, way higher than the previous peak buyback rates of 2020/21 (I think the 2021 total was $27 billion). Though I suppose Berkshire's market cap is way higher now, so it's easier to put more dollars to work toward buybacks.

And even if he does buy his stock two days post-AR every year... $15mm is a tiny chunk of the daily volume, who cares.

Well, we've never really had a scenario where Berkshire's CEO could be personally buying in shares with knowledge of undisclosed buybacks. If Abel hadn't disclosed the buybacks in real time, that's the scenario we'd be in today; one could argue that this would constitute an information edge that the CEO would have over other shareholders. I bet that's why they opted for disclosure here, though I agree it seems odd at first glance.

I always wonder what Becky thinks of Joe's comments...

Also found this transcript of his comments re: putting his salary into BRK.A: https://x.com/TheTranscript_/status/2029568736718442995

There's also this one: https://www.cnbc.com/video/2026/03/05/berkshire-ceo-greg-abel-on-succeeding-warren-buffett-i-still-check-in-with-him-nearly-every-day.html?__source=sharebar|twitter&par=sharebar Joe Kernen is a scourge.

Anyone have a link to the full Abel CNBC appearance? Hard to track down these clips.

Yup. His comments to Berkshire underwriters advising them to assume that every cyber policy they write will be money-losing come to mind...

Yeah, I was thinking about this... what % of the current insurance float do we think is purely attributable to Ajit? Or, how much float goes away with him not at the helm? For example, Geico won't really suffer without Ajit around, and that's a big chunk o'the float. It's the more sui generis/exotic/giant reinsurance-y risks that'll be harder for Berkshire to underwrite... those premia might just go away for good. But overall I think Berkshire sans Ajit still has a ton of safe float to play around with. Sort of like Berkshire losing Buffett on the investment side: yeah, you lose the greatest decision-maker in that domain, but the unique-to-Berkshire framework for rational decision-making in that domain lives on, and that framework in and of itself constitutes an edge. (In insurance, Berkshire's key differentiating factor is its willingness not to write business when prices are bad. There's no reason that structural edge will disappear without Ajit, and that's just one of a few structural edges Berkshire's honed.)

I think the setup/plan is pretty simple: -Grow what we own as best we can -Bolt-ons -When recession hits, try to make 1-3 giant investments -Hit the buybacks hard when they make sense That's really all they have to do... and over the next 10 years, Berkshire will probably get to do all of these activities. It's not crazy to hold off on dividends.

Yeah, it's anti-fragile, tax-efficient, low-basis, honest... and it beats cash. Would I rather hold (or buy), like, Amex at 14x normalized earnings, though? Any day of the week.

Anyone attend the 2025 Boston Investment Conference back on October 30th? If so, would love to hear any thoughts/notes, particularly from the Todd Combs + Seth Klarman talk.

Well, we do know that Buffett thinks Todd did a good job at Geico, per the latest annual report: Less clear how well his portfolio worked out, but the Geico thing is pretty major.

Whoa! And Ron Olson recently left the board.

Do we known/suspect who initiated the DPZ position? If not, I suspect... Todd. Todd once mentioned he's a big fan of Tom Bancroft; Bancroft has a major DPZ position. Speculative, I realize.

Yeah, anyone have thoughts on what this accomplishes?

I liked his post, but I wonder what he thinks of the Shiller P/E, which is approaching 2000 levels (and doesn't account for the fact that taxes are much lower today). I think the "bubble" debate is a bit of a fool's errand. People debate the binary label, but what really matters is the underlying math of equities' expected returns, which fall on a continuum depending on starting valuation, future growth, etc. There isn't some on-off "bubble" switch that flips over at a certain point; whether or not there's a bubble these days, we can say that expected returns from here for large swaths of US equities are low.

I can't wait to hear Jain's take on the thorny subject of insuring the AI model builders/hyperscalers at the next annual meeting. Have to imagine Berkshire's underwriting those risks left and right!